I got a real wake-up call today as I was gathering information to put on my next YouTube video on our channel “A Decade to Freedom”. I have this idea of revealing the total amount owed and just how good we do from month to month. It shows progress to the watcher and motivates us to do more!I was getting the total of what we owe in all, including mortgage, credit cards etc… And thought I knew how much we owed. Actually I was pretty certain of it.
Do you know what I mean? Do you do that imaginary calculation inside your head. But as I did more ground work today. Well actually it was some of the final ground work to keep track of car payments and house payments as I finally got online to register for these things to keep a monthly track on them, and when I finally tallied everything, I got an OMG moment of, “REALLY!” We owe all of that!
Not that it was double of what I thought or anything, but it was quite a bit more than what I believed it was.
This + that + that and this ends up being a lot more than you think in the end.
Although I’m still pretty confident we can reach our 10 year goal in time, it suddenly made me think of when I watched this show on TV about people who were not the greatest with their finances, and when they were asked to estimate what they owed. They were always off and I always wondered; how can you not know what you owe?
But it’s easy to do, and here is why.
If you were like me and your car payments just come out of your account every month and you are not really tracking what you owe, it’s easy to estimate wrong.
Same for mortgages if you are not with a bank and you only get your mortgage statement once a year at the end of the year, and what you pay does not all go on the capital, (as everyone has interest on loans) that can lead you to confusion. Most of us don’t take into account interest and that is one of the most important reasons why to get debt free, you almost always end up paying huge amount of interest on everything you borrow!
If you also estimate what will be left on your home in a couple of years after you have paid your revolving credit, you must take into account you are not there yet, so that fictional amount does not apply.
With the age of technology, it’s getting so much easier to track everything, so if you can, register online to all the institutions you owe and keep an eye on your numbers in real time. It can alleviate that shock of finding out what you really owe in the long run.
And finally when you do get those scary numbers all together, you must remember, it’s not the amount that is shown to you on that piece of paper that is important but how much less will be there in a month, in two, in 6 and a year. If you keep showing yourself the numbers and they are going down, it’s usually a sure fire way to motivate you to see it keeps going down.
So don’t do like me for so many years, stop living with fiction. Find your numbers and make them run in the right direction! To Zero!